Bitfinex Granted 2 of 3 Subpoenas in Hunt for Missing Millions

Cryptocurrency exchange Bitfinex has suffered a minor blow in its hunt for millions of dollars that went missing two years ago.

Bitfinex’s parent firm, iFinex Inc., is seeking to trace $850 million in user funds seized by authorities in four different countries after bank accounts held by its payment processor, Crypto Capital, were frozen in August 2018.

iFinex applied for subpoenas in Colorado, Arizona and Georgia in April, but the U.S. District Court of Georgia recently denied its request due to filing errors.

A federal judge did grant iFinex’s application in Arizona in April and the third subpoena filing in Colorado, for a different bank, was granted last month.

According to the court ruling filed June 8 in Georgia, Magistrate Judge Alan J. Baverman said the bank iFinex is trying to subpoena merged with another financial institution and is now based in North Carolina. As such, the Georgia court does not hold jurisdiction over the exchange’s petition.

Moreover, for reasons unknown, iFinex named Citibank in its petition rather than the intended SunTrust Bank, which merged with Branch Banking and Trust Company (BB&T) to form Truist Bank in December 2019.

"[It] appears that Applicant ... has filed its petition in the wrong district. Even if Applicant had shown that SunTrust Bank still exists and is headquartered or otherwise 'resides' or 'is found' in this district, the petition would still be due to be denied as the proposed subpoena is addressed not to SunTrust Bank (or Truist Bank) but instead to Citibank,” Judge Baverman wrote.

The missing funds were first made public by the New York Attorney General’s office which alleged that Bitfinex lost the $850 million and later used a secret loan from affiliated stablecoin issuer Tether to secretly cover the shortfall.

See also:New York Attorney General Calls Bitfinex’s Legal Stance ‘Deeply Perverse’ in New Filing

In addition to filing its petition in the wrong district and naming the wrong bank, iFinex also failed to present relevant supporting evidence to the court. Lastly, the judge concluded that a lack of clarity on the time frame of the subpoena meant it was “unduly intrusive and burdensome."

The various state subpoena applications follow an initial subpoena request in October 2019, filed in California, where the exchange sought testimony from a former TCA Bancorp executive about Crypto Capital’s accounts. This subpoena was later granted.

See the Georgia court ruling in full below: